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Understanding How Consumer Risks in Digital Social Payments Can Erode Their Financial Inclusion Potential

Understanding How Consumer Risks in Digital Social Payments Can Erode Their Financial Inclusion Potential

Jamie Zimmerman and Silvia Baur

01 March 2016

Source: CGAP

Because digital social payments (DSPs) recipients are a fast-growing, yet often overlooked, digital financial services (DFS) segment, acknowledging and addressing the most common and consequential consumer risks they face should be a priority for any program or provider seeking to unlock the potential benefits of DSPs for the poor.

Low-income recipients of cash transfers—whether government to person (G2P) or donor to person (D2P), and whether conditional or unconditional—increasingly receive their payments digitally. This digitization trend is expected to continue. The value of electronic transfers that are delivered into store-of-value accounts and accessible via debit cards or mobile money wallets, referred to here as “digital social payments,” is estimated to more than triple between 2010 and 2017 to over US$194 billion (Riecke 2014).